New Delhi, Dec 14: In a big setback for Fortis Healthcare, the Supreme Court (SC) on Friday ordered to maintain a status quo with respect to stake sale of the hospital chain to Malaysia’s IHH Healthcare Berhard.
Hearing a contempt plea moved by Daiichi Sankyo Co, the apex court today issued notices to Indiabulls Housing Finance, Oscar Investment and RHC Holding, and directed all the parties to maintain a status quo. Fortis Healthcare shares tanked over 10 per cent in morning trade on the Bombay Stock Exchange (BSE), but recovered shortly to Rs 140.7 a piece (down 7.2 per cent) around 12 pm.
In its contempt plea in the SC, Daiichi alleged that the Singh brothers, Indiabulls, Oscar Investment and RHC Holding created fresh encumbrances with respect to Fortis Healthcare on 1.2 million shares held by Fortis Healthcare Holding despite the court’s orders against it.
The apex court had on February 15 allowed banks and financial institutions to sell shares of Fortis Healthcare pledged with them on or before August 31 by the Singh brothers. The court had then, however, said that there could be no fresh encumbrances created by Singh brothers and others and had directed maintenance of a status quo.
Daiichi Sankyo has alleged that the Singh brothers and Indiabulls had created fresh encumbrances for nearly 1.7 million shares of the total 2.3 million shares that were left after the top court’s order. Of these, while Indiabulls created encumbrances for 1.2 million shares, the rest had either been created by Singh brothers or other third parties, Daiichi had said in its petition.
Earlier this year, the Delhi high court had allowed Singh brothers to sell Fortis Healthcare shares based on their submission that the disclosed value of their unencumbered assets would remain unaffected. The value of unencumbered Fortis Healthcare assets held by Fortis Healthcare Holding is estimated to be roughly around Rs 25 billion.
Meanwhile, IHH Healthcare has already pumped in funds (Rs 40 bn) in Fortis Healthcare following the deal getting the nod of the competition watchdog. It is, in fact, planning to infuse an additional Rs 20 bn to meet fund requirements of Fortis Group. IHH has already launched a mandatory open offer for 26 per cent shares of Fortis Malar, a step-down subsidiary of Fortis Healthcare, and has received the Sebi nod to launch an open offer for 26 per cent stake in Fortis in December.